June 15, 2012 v 5 DRAFT DRAFT DRAFT DO NOT CITE OR QUOTE WITHOUT AUTHORS’ PERMISSION Human Development, State Transformation and the Politics of the Developmental State Forthcoming 2013 as Chapter 37 in The Oxford Handbook of Transformations of the State edited by Stephan Leibfried, Frank Nullmeier, Evelyne Huber, Matthew Lange, Jonah Levy, and John D. Stephens. Oxford University Press. Peter Evans University of California, Berkeley and Patrick Heller Brown University [This version submitted: June 15, 2012] Please do not quote without authors’ permission. ABSTRACT The concept of the “developmental state” has been transformed over the course of the last thirty years. Since East Asian successes brought the concept into vogue in the 1980’s and 1990’s, theoretical and empirical work has transformed the concept into a general ideal type whose relevance transcends East Asia. While debates on the developmental state are still marked by the original use of the concept to analyze East Asian strategies of industrial transformation, social scientists have begun to supersede these origins, just as the states themselves have superseded them. This paper is intended as a contribution to that task. Development economics now acknowledges that expanding human capabilities trumps capital accumulation as a driver of economic growth as well as of development more broadly defined. Refocusing attention from capital accumulation to human development entails rethinking the role of the developmental state. Coherent state apparatuses, able to deliver collective goods have become more important than ever, but the state-society relations required for success have changed. Close ties with industrial elites are no longer sufficient and may be counter-productive. Diversely structured networks that create effective ties to a broad cross-section of civil society become essential and democratic deepening appears to have become a key feature of success. In addition to reviewing the conceptual issues involved in theorizing the transformation of the developmental state, we bring three pairs of cases to bear on the argument. The parallel transformations of the key original cases – Korea and Taiwan – over the course of the last thirty years are used to make the case for the changing character of the developmental state. The differential success of two major developing countries in constructing effective developmental states – South Africa and Brazil – is used to support the proposition that the ability to deliver human development outcomes depends on democratic deepening as much as it does on technocratic capacity. Finally, examination of the performance of the two giants of the global South – India and China – serves to underline the hypothesis that the increasing political power of capital may undermine the capacity of the developmental state in the absence of countervailing increases in democratic engagement and accountability. 2 The idea of the “developmental state” has proved one of the most robust, charismatic concepts in development theory. In the 1980’s and 1990’s, the concept played two roles in developmental debates. First, it provided a coherent counter to the dominant neo-liberal narrative that portrayed the market as the master institution underlying both growth and welfare. Second, it focused attention on the extraordinary success of economic transformation in the East Asia region. By the turn of the millennium the application of concept had spread beyond these origins, but it is still useful to recall its beginnings. Chalmers Johnson (1982) deserves credit for having used the concept of the developmental state to explain Japan’s rebirth from the ashes of World War II as an industrial power, but Korea and Taiwan, especially as portrayed in the influential work of Amsden (1989) and Wade (1990) were the iconic cases. Korea and Taiwan were even more powerful cases for the transformative role of the state than Japan. Japan had been an imperial power with sufficient industrial capacity to undertake a world war before the period described by Johnson. Korea and Taiwan were former colonies with income levels below those of the more successful countries of Africa in the immediate post World War II period. When analysts like Amsden and Wade laid out connections between state structures and strategies and the ability of these countries to create globally competitive industrial sectors, the impact on developmental debates was fundamental (see the discussion in Lange introduction to this section, as well as Evans 1995). We will not review these seminal formulations or the early history of the key cases on which they were based in any detail. Our aim instead is to focus on the more recent transformations of the developmental state. One task is updating understanding of original developmental states themselves by chronicling their historical transformation. The classic characterizations of the development state in Korea and Taiwan are focused on the period from the mid-1960’s through the mid-1980’s. Any contemporary discussion of the developmental must take equal account of the evolution of these iconic cases from the 1980’s to the present. Even more important, however, is looking at the developmental state as a theoretical concept rather than as a description of a particular set of state apparatuses 3 during a particular historical conjuncture. Removing traditional Anglo-Saxon blinders and admitting that successful developmental outcomes depend on particular configurations of the state apparatus itself and its relations to society is a start. One must then ask what are the particular structural characteristics associated with developmental success and what are the political and organizational dynamics of their evolution? This in turn requires locating the analysis of the developmental state within a more general theory of what outcomes constitute “development” and what inputs are most crucial to producing those outcomes. We will begin with by setting out the general theoretical approach to development that underlies our understanding of the developmental state. Its core is “Senian,” emphasizing the essential role of expanding human capabilities, not just as the ultimate goal of development but also as an essential means for generating the increased productivity that is the foundation of economic growth (Sen, 1999). We will then elaborate the implications of that perspective for re-conceptualizing the developmental state. The bureaucratic capacity of the developmental state looks even more important than classic analyses suggested. The analysis of the politics of the developmental state, however, requires serious revision. Rather than being a relatively simple politics of rational but authoritarian efforts to realize a national project of accumulation, the politics of the developmental state become the complex and often ambiguous politics of democratic deepening. We flesh out this theoretical understanding of the developmental state by looking at three pairs of case studies. First, we will turn to the parallel evolution of the iconic developmental states during the last three decades – Korea and Taiwan. Then we will look at Brazil and South Africa – two major developing states that have been characterized as at least partial embodiments of the developmental state, but have taken divergent paths during the period under consideration. Finally, we will look at the two giants of the Global South – India and China. While neither of these two states has been traditionally considered a classic developmental state, they are key cases for any general understanding the connection between state structures, state-society relations and developmental outcomes. In the empirical analysis as in the theoretical discussion, our 4 emphasis is on the political complexities of connecting the state to civil society in a way that enables a broad-based expansion of human capabilities. Development Theory and the Developmental State Understandings of the role of the developmental state have changed, first of all, because development theory has changed. Amartya Sen’s (1999) capability approach to development converges modern models of growth.1 Sen’s focus on expansion of human capabilities as both the paramount goal of development and the leading means of achieving economic growth dovetails with a variety of strands in “modern economics.” It fits nicely with conventional econometric wisdom regarding the powerful role of “human capital” in generating economic growth. It also fits with the theoretical arguments and empirical evidence put forward by new growth theorists who have made the case that creating and utilizing new ideas was more important to twentieth century growth than the accumulation of plants, equipment and other tangible capital.2 Traditional, mid-twentieth century economic thinking was often read as arguing that the accumulation of capital was the driver of growth and growth was the cause of improvements in health, education and well-being. Current research on economic growth emphasizes improvements in human development indicators as causing growth in income. The evidence is rich, varied and incontrovertible. In a series of econometric papers, Ranis, Stewart and their collaborators looked at the interactions between growth and human development.3 Their data analysis “contradicts the conventional view that HD [human development] is purely a result of, as opposed to being a critical input into long run expansions in EG [economic growth] (Boozer et al. 2003, 25). They conclude